Bloomberg.com – A Good-Bad Economic Outlook Some analysts surveyed by Bloomberg see a 20 percent second-half surge; others, even at the same firms, are trimming their forecasts here’s discord on Wall Street: Strategists at major American investment banks see a double-digit stock rally in the second half, even as economists—sometimes at the same firms—are trimming… Continue reading Predicting The Stock Market
The Economist – Economics focus: Fiscal fundamentalists Austerity or stimulus? Some economists have much more extreme views than that What, then, are the limits of wisdom and prudence? A big-spending government might crowd out the private sector, commandeering resources that would be used better elsewhere. But given the amount of slack in America’s economy, that… Continue reading Stimulus vs. Austerity, The Debate Continues
The Economist – Wheat: Straw man High wheat prices reflect fires in Russia, not problems in world food markets OR a brief period it looked like “Food Crisis 2.0”, or another “great grain robbery”—the episode in 1973 when a Russian harvest failure sent commodity prices soaring. Spot prices for wheat rose by 24% in July,… Continue reading Wheat
The Economist – Joy, pain and double dips Fear of renewed recession in America is overblown; so is some of the optimism in the euro area SELDOM does the United States look at Europe with economic envy. The past few weeks, however, have been one of those rare phases. Concern about America’s stumbling recovery has… Continue reading The American Economy Struggles
The Wall Street Journal – Greek Recession Deepens The Greek economy contracted sharply in the second quarter … The national statics service Ellsta said Thursday that second-quarter gross domestic product fell 1.5% on a quarterly basis, weaker than forecasts of a 1% drop and the 0.8% fall in the first quarter. Jobs data for May,… Continue reading Europe Struggles … Or Not?
The Financial Times – James Rickards: Fannie and Freddie’s bond market upheaval A strange fog has enveloped the bond market. Once, the strength of a bond was based on the reputation of its issuer. But a change began in 2008, as Fannie Mae and Freddie Mac verged on bankruptcy, and legislation was rushed through the… Continue reading Fannie And Freddie
The Economist – Currencies: Race to the bottom A weak economy and an active Federal Reserve have driven the dollar down since June. Will that last? How quickly things have changed. On August 11th the dollar fell to a 15-year low against the yen of ¥84.7. It perked up against the euro to $1.29, though… Continue reading The Dollar
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Zero Hedge (Blog) – Bernanke Central Planning LLC’s First Faux Pas – Contrary To Prior Disclosure, Fed Announces Will Also Purchase 30 Year Bonds Will someone who read the official Fed statement yesterday, please indicate where it said Liberty 33 would purchase 30 Year bonds? We will spare you the trouble – it was mentioned… Continue reading The Federal Reserve Will Buy 30-Year Treasuries After All
The Financial Times – The great false choice, stimulus or austerity The debate on the need for further fiscal stimulus or quicker retrenchment has become too ideological, and too extreme. Underneath it, however, there is more agreement on the basics than may be apparent at first blush. Indeed, despite the warring comments that have appeared… Continue reading Stimulus vs. Austerity
<Click on chart for larger image> FT Alphaville (FT Blog) – Guest post: El-Erian on violent market moves Why such a sharp sell-off in equities on Wednesday, together with a further rally in US government bonds? I suspect, writes Mohamed El-Erian, that three US-related drivers are part of the answer – one is obvious, and… Continue reading Wednesday’s Selloff
The Financial Times – The true costs of very low interest rates Markets tend to cheer falling interest rates. Low interest rates, however, can entail real economic costs that become evident over time…Interest rates are the most important prices in the economy, according to Nobel laureate F.A. Hayek, because they reflect the collective time preference… Continue reading Living In A Low Interest Rate Environment